PSEi falls anew on rate hike, inflation fears

The Philippine Stock Exchange Index (PSEi) extended losses on Friday as investors digested the Bangko Sentral ng Pilipinas’ (BSP) latest rate hike and rising inflation expectations.

The benchmark index fell 0.67 percent or 40.32 points to close at 5,943.49.

Philstocks Financial research manager Japhet Tantiangco said the decline came after the BSP raised policy rates by 25 basis points. This prompted investors to reassess risk amid tighter financial conditions.

Tantiangco said market sentiment was also dampened by expectations of higher inflation. The BSP is projecting average inflation at 6.3 percent this year.

“Currency weakness and higher borrowing costs added pressure on equities. Sentiment was further dampened by persistent uncertainty in the Middle East, keeping buying interest subdued,” said Luis Limlingan, head of sales at stock brokerage house Regina Capital Development Corp.

Trading activity remained subdued, reflecting cautious positioning among investors.

Net value turnover stood at P5.23 billion, below typical levels, indicating tepid participation.

Foreign investors continued to exit the market, posting net outflows of P628.11 million.

Sectoral performance was broadly negative, with only the industrials posting gains, inching up 0.1 percent.

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The banking sector led the decline, dropping 1.63 percent as higher rates raised concerns over borrowing costs and loan demand.

Market breadth was weak, with decliners outpacing advancers, 110 to 80.

Monde Nissin Corp. emerged as the top gainer, rising 1.21 percent to P6.68.

Bank of the Philippine Islands was the main laggard, sliding 3.46 percent to P92.10.